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November 08, 2010

Crowded Mature Markets Don't Scare Blekko or RockMelt

Two of the most heavily anticipated and visible product debuts in the past month have been Blekko, the slashtag-happy curated search engine powered by humans and fancy algorithms, and RockMelt, the new social-centric Web browser that drags Facebook alongside throughout your page perusing experience. Both took years of development, sport dozens of employees and raised significant capital. Both are intriguing enough to gain curiosity from early adopter tire kickers. And both are raising eyebrows from skeptics who wonder why otherwise smart folks would charge headlong into what are clearly mature markets with many high profile competitors. For every ubergeek checking out the latest toy, there is somebody else wondering if the world needs "yet another" search engine or Web browser.

Short answer: The world always needs new innovation, and there are countless examples of companies entering into crowded markets that needed some shaking up, who found tremendous success - including in these two markets.

Corollary: To consider either Blekko or RockMelt a success does not require either of them to topple the dominant market leader. Blekko is not a Google search replacement in most cases, and Rockmelt won't necessarily have you uninstalling Firefox. If they can get 1%, 5% or 20% of the market, it is significant indeed. (See: Don Dodge from 2007: Why 1% of search market share is worth over $1 Billion)

Google Takes On Crowded Search Market, Firefox Takes On IE

Google's entry into the search market at a time when Alta Vista could be considered the quality leader, with additional players such as Excite.com, Infoseek, HotBot and yes, Yahoo!, may seem like ancient history now, but the company looked at an industry which needed disrupting. It obviously worked. Meanwhile, Firefox emerged, through Mozilla, out of the ashes of Netscape, burned by the overwhelming market leader, Internet Explorer. It's now safely assumed Firefox is the strong #2 to IE, with Google's own Chrome holding the #3 position and Apple's Safari at #4.

One could highlight the opportunity for reinvention of new markets for some time strictly by looking at Apple and Google alone, even though there are many more examples, from big companies and small alike who have looked big brand names in the face and pushed ahead anyway.

Google Reader Emerges to Take On Bloglines

If you read Chris Wetherell's fantastic two part series about the birth of Google Reader, and Mihai Parparita's companion piece about how he joined the team, you can see significant skepticism over whether the world needed yet another feed reader when NetNewsWire and Bloglines did just fine. Reader now is easily the #1 share holder and Bloglines just closed up shop.

Apple Introduces an MP3 Player and a Phone!

In October of 2001, Apple introduced a hard-disk based MP3 music player. The MP3 player, called iPod, launched with competing players like the Creative Nomad Jukebox and Rio's line of digital audio devices already in the space. That they launched an MP3 player seemed like madness. To others, their launch of the iPhone was similarly crazy, even after the iPod's runaway success. Resident curmudgeon John Dvorak warned in 2007 that Apple should pull the plug, adding "It's the loyalists who keep promoting this device as if it is going to be anything other than another phone in a crowded market."

The crowded market had plenty of room for Apple.

One doesn't have to look too far away from this space to find that Google's Android OS took on the successful iPhone, as well as Symbian, Blackberry, Windows Mobile and others, and found opportunity to grow significant market share. Facebook launched into a market occupied by Friendster and MySpace. Gmail was introduced years after Yahoo! Mail and Hotmail had amassed millions of users apiece.

Is it going to be a challenge for Blekko and RockMelt to separate themselves from aggressive competitors? Absolutely. But often, empty markets without participants are empty for a reason - and crowded markets are there because there is potential seen by multiple players. Blekko and RockMelt each now have the opportunity to compete on their merits, and attract their own target users. It's not necessarily a zero sum game, and both seem to competitive enough to bring value, with enough humility to not trip over their own hubris.